Scottrade acquisition could be a boon to TD Ameritrade RIAs

Members of TD's 'Advisor Direct' program may develop new clients. <b><i>(Related read: <a href=&quot;http://www.investmentnews.com/article/20161024/FREE/161029966/ria-firms-see-record-number-of-ma-deals-in-first-nine-months-of-2016&quot; target=&#8221;blank&quot;>RIA firms see record number of M&amp;A deals in first nine months of 2016.</a>)</b></i>
OCT 24, 2016
TD Ameritrade Holding Corp.'s $4 billion deal to buy Scottrade Financial Services Inc. may be a boon for the registered investment advisers in TD's network. The deal, announced Monday, adds about 800 RIAs, according to Tom Nally, the president of TD Ameritrade Institutional, the firm's brokerage and custody services division. It also increases its client base by nearly 50%, possibly uncovering new client relationship opportunities for existing RIAs on its platform. The firm is gaining market share as the wealth-management industry consolidates amid rising competitive pressures tied to compliance and new technology. TD Ameritrade will have more than 10 million client accounts after the Scottrade deal is completed and will more than quadruple the number of its retail branches. “I think it's a great acquisition strategically,” said Steven Giacona, chief executive officer of Round Table Wealth Management, an RIA firm with about $900 million of assets and offices in New York and Westfield, N.J. “It gives TD a much broader footprint in the investment advisory market for mainstream investors.” Mr. Giacona said Round Table is among firms that TD Ameritrade has approved for its “Advisor Direct” referral program, and sees the opportunity to gain new clients through the Scottrade deal. TD Ameritrade refers its retail brokerage customers to RIAs in the Advisor Direct program on the institutional side of its business when they are seeking more than online help for their investment accounts. "I'm excited about it,” he said, adding that he also expects the Scottrade acquisition will increase TD Ameritrade's “buying power in the market,” benefiting RIA clients who partner with the firm for technology services. The industry has been consolidating as firms look for economies of scale that will help them invest in technology resources to remain competitive, according to Mac Sykes, an analyst at Gabelli & Co. Financial services firms are spending more to reach clients through their mobile devices, he said, as well as for cybersecurity and software investments needed to stay on top of regulation such as the Labor Department's new fiduciary rule. “We'll have about $1 trillion in assets when this deal closes,” Tim Hockey, TD Ameritrade's chief executive officer, said in a phone interview. “If you're a TD Ameritrade client, that scale allows us to invest in the future.” The Scottrade deal adds 500 retail branches to TD Ameritrade's 100, according to Mr. Hockey, who said that after cutting overlapping locations, the firm expects to have about 450 stores in total. The acquisition is expected to be completed by Sept. 30, 2017, with an anticipated clearing conversion to TD Ameritrade systems in 2018, according to the firm's statement Monday. “It just gives us that much more to invest because of the economies of scale it creates,” Mr. Nally said by phone.

Latest News

Osaic snaps up $13.5B CW Advisors
Osaic snaps up $13.5B CW Advisors

The deal for the Audax-backed RIA based in Boston gives Osaic a strategic foothold to attract more advisors and clients across the wealth spectrum.

Senate wants changes to Trump’s tax bill; here’s what’s expected
Senate wants changes to Trump’s tax bill; here’s what’s expected

‘Revenge tax’ on foreign investors could be scrapped in new version.

CFTC’s regulatory pioneer Bagley dies aged 96
CFTC’s regulatory pioneer Bagley dies aged 96

Veteran legislator helped set the standard for derivatives regulation.

Getting your head round AI when compliance is a big concern
Getting your head round AI when compliance is a big concern

As industry edges closer to the technology, an expert explains the options.

Advisor headcount down at Bank of America, Osaic and UBS so far in 2025, Wolfe Research analyst says
Advisor headcount down at Bank of America, Osaic and UBS so far in 2025, Wolfe Research analyst says

Counting advisor moves in and out of firms requires some art as well as science.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave